I had taken one Pension policy during Feb 2014 and since then I had paid the premiums for 7 consecutive years. Policy current status is paid up and the Sum assured is zero as per policy document.
Total amount paid towards premium is 70000 and the current fund value is 224000.
I want to surrender and approached the Icici Prudential. They are advising me that the total surrender value is taxable as income from other source and suggesting me to take one Term Insurance policy so that some 10 to 15% of the surrender value will be taken as premium and the remaining amount would be credited to my bank account which does not attract any tax.
Earlier when I spoke to the icici prudential call center team from Mumbai, they had informed me that the entire amount is tax free and i need not pay any tax.
I’m confused here and pushed me into dilemma whether to continue or exit.
Kindly advise me. Thanks much in advance.